art paintings in IP: Depreciable?

[Rob G.]

yes sir ... I'll be officially buying them off her.

So she will be assessed immediately for income tax on the proceeds where her profits and commissions amount to an income activity and not a hobby.

Whilst you get to claim the cost over 100 years, with a full balancing income assessment on disposal where the painting increases in value (not even a CGT discount or exemption that an investor would get !!).

Or deduct over a few years in the low cost asset pool (less than $1000) along with any balancing income at disposal where the sale value exceeds your pool balance.

Or an immediate deduction for paintings of value no greater than $300, but again a balancing adjustment for income on disposal where the value has appreciated.

Subject to any non-arm's length restrictions on valuation.

Of course, if your wife claims she is just pursuing a hobby and doesn't pay tax on the proceeds, then you might consider Part IVA.

Cheers,

Rob

 

[tdh78au]

So she will be assessed immediately for income tax on the proceeds where her profits and commissions amount to an income activity and not a hobby.

Correct. She used to do them as a hobby, until folks started to offer to buy them off her. The advantageous part for me being is getting "mates" rate
and encouraging her to give it a go

Of course, if your wife claims she is just pursuing a hobby and doesn't pay tax on the proceeds, then you might consider Part IVA.

What does IVA [or Part IVA] stand for?